Xero vs Wave Comparison: Is Wave Accounting or Xero Better?

Welcome to the ultimate showdown between the two big names in the accounting industry: Xero vs Wave comparison article. 

With its sleek interface and powerful features, Xero has been an industry favorite for more than a decade. Wave has been making "waves" worldwide with its free and ready-to-use software. 

Who will come out on top in this Xero vs Wave comparison? 

Will it be the powerful New Zealander or the ambitious Canadian? 

Let's dive in and find out!

What is the difference between Xero and Wave accounting?

The main difference between Wave and Xero is that Wave is designed for small businesses and freelancers, while Xero is aimed at small and medium-sized businesses. Xero offers a wider range of features, including advanced invoicing, multi-currency accounting, inventory management, and asset management, while Wave has a more lightweight selection of features.

There are also some differences in terms of integrations. More specifically, Xero integrates with 800+ business tools, while Wave's integration options are more limited. Xero has a paid subscription model, while Wave is free to use. Wave is built for beginners, while Xero requires some previous experience with accounting software. Both tools are fantastic alternatives to cloud-based accounting software like QuickBooks Online, Zoho Books, and Freshbooks. 

Although we'll go over their best features in greater detail below, we have a separate Xero review and Wave app review that examine the two accounting solutions from up close. 

Xero vs Wave comparison chart

We compared the two accounting solutions in 10+ categories that you can find in the table below. We gave our most honest opinion on which app is better for each category, although this will depend on your specific needs and preferences. Get a quick overview of how Xero vs Wave compare here:

Xero vs Wave pricing

If we compare Xero vs Wave in terms of pricing, they have their differences. Xero has three paid plans, Early, Growing, and Established. 

The Early plan starts at $13/month and is great for sole traders, new businesses, and the self-employed. In this plan, you'll find all the basic accounting features. 

The Growing monthly plan stands at $37/month and includes everything from the Early plan, plus unlimited invoices and bills and reconciling bank transactions in bulk. 

The Established plan costs $70/month and introduces more advanced features such as multiple currency support, project management, expense claims, and in-depth analytics. 

Currently, there's a 75% discount on all plans for the first three months. 

Wave lets you use its invoicing, accounting, and banking software for free. However, there are some fees associated with payments and payroll. Credit card processing costs 2.9%, plus 60 cents for each transaction. The processing fees for American Express are slightly higher, costing you 3.4% plus 60 cents per translation. For bank transactions, there's a $1 minimum fee and a 1% charge. 

Wave also has paid add-ons, including Wave Payroll, which starts at $20/month for self-service states and $40/month for tax-service states. Other paid services include Bookkeeping Support ($149/month) and Accounting & Payroll Coaching ($379 one-time fee). 

Which is better?

The obvious choice here would be Wave, as it's free of charge. However, keep in mind the transaction fees can add up, especially if you're dealing with a lot of online payments. The best option would be the one that fits your specific business needs. 
 

Wave vs Xero free versions

Unfortunately, Xero doesn't have a free plan, only a free 30-day trial. 

Wave is better in this category as it offers its invoicing, accounting, and banking software for free. There are no monthly subscription fees, setup fees, or hidden charges. 

With the free version, you'll be able to do your bookkeeping, create customizable invoices, and track expenses without paying a dime. However, you'll be required to pay processing fees for making online payments. Payroll is also a paid add-on. 

Which is better?

Comparing Wave vs Xero in terms of free versions, Wave comes out as the better option as it offers its software free of charge. 
 

Customer support

All Xero users get free 24/7 online support. The bad news is there's no phone support or live chat but only email support. You can always hire a Xero professional advisor to teach you how you can best use the software for your accounting needs. 

Wave offers only email and live chat support to users of their paid services. There's no phone support available. Users of the free software can't get assistance from a live agent. They can chat with the chatbot or look for help in the self-service Help Center. 

Which is better?

This round is a tie. 
 

Knowledgebase & learning

Xero has an extensive knowledge base that contains plenty of learning resources that can teach you how the software works. There are help articles, videos, guides, and online courses.

Wave's knowledge base contains help articles and video tutorials. There's an active blog where you can find articles on a range of topics, including accounting, taxes, and payments. 

Which is better?

Xero has a more extensive knowledge base than Wave, including online courses. Wave's knowledge base is more limited.  
 

Wave vs Xero features & functionality

Now that we’ve compared Wave vs Xero in terms of pricing, free plans, and customer service, it’s time to see how they stack up against each other in features and functionality.  

Xero or Wave for ease of use?

Xero's user interface (UI) is modern, intuitive, visually appealing, and well-structured. However, the software has a steeper learning curve than other accounting software. If you're a beginner, Xero may not be your best choice. It may take some time to get familiar with all its features, but once you get the hang of it, it becomes much easier to use.

Wave is designed for ease of use and is accessible to those with no prior accounting software experience. Setting it up is quite straightforward. If you're new to accounting software, Wave may be a great starting point, especially if you don't have the time to invest in learning a more complex solution.

Which is better?

Wave is the better option if you're a beginner to online accounting software and need a more lightweight solution. Xero might be a better pick if you have some experience in using accounting software. 
 

Wave vs Xero online versions

Wave and Xero are available on the following browsers: Chrome, Firefox, Safari, and Edge. 

Which is better?

This round is a tie as both apps are available on all modern browsers. 
 

Xero vs Wave desktop versions

Xero has a desktop app for both Mac and Windows. These apps let you perform accounting tasks, such as creating invoices, reconciling bank transactions, and managing expenses. The Xero desktop apps can be a useful tool for users who prefer a more traditional, desktop-based experience.

Wave doesn't have a desktop application for Mac or Windows. While there's no desktop app for Wave, the web-based platform is designed to be user-friendly and accessible, so you'll be able to complete accounting tasks from anywhere at any time. 

Which is better?

Xero is the better option for users who prefer working in desktop accounting software rather than in online apps, as it's the only one of the two that has desktop apps. 
 

Wave accounting vs Xero mobile apps

Wave has an app called Wave Invoicing that enables you to generate invoices and process payments while on the move. There's also the Wave Money app, which is a bank account with no fees that automates accounting tasks.

Xero has six mobile apps available for Android or iOS devices. There's the Xero Accounting app that lets you do most of the tasks you can do in the online version. The Expenses mobile app lets you claim expenses and mileage, as well as approve, edit, and decline claims. Other mobile apps include Xero Projects, Xero Me, and Hubdoc. 

Which is better?

This Wave accounting vs Xero round is a tie as both software solutions have mobile apps for Android and iOS. 
 

Integrations

Xero integrates with 800+ third-party apps and tools to streamline your workflows. Additionally, the software integrates with thousands of more apps via Zapier. Xero also offers APIs for developers. 

Wave only integrates natively with in-house apps, including Wave Payments and Wave Payroll. 

Via Zapier, it connects to more than 5,000 apps. 

Which is better?

Xero is better in this category as it has a wider range of native integrations. 

A note on Xero Wave integration

Unfortunately, there’s no native Wave Xero integration. The good news is that you can connect the two platforms via "connector" apps like Zapier. These "connector" apps let you send data from one app to the other automatically. There are plenty of triggers and actions you can choose from.
 

Product limitations

Xero reserves its best features, like the expense management and multi-currency functionality, for its higher plans. The Early plan also limits the number of invoices you can send and bills you can create. 

Another downside of Xero is that you can't manage multiple companies under a single account. You can add as many organizations as you like, but you must choose a separate pricing plan for each one. 

Xero is better suited for small or growing companies that need more advanced features. The software might be overkill if you're a solopreneur or freelancer with more basic needs. 

Wave is not without its disadvantages. The software doesn’t have any dedicated time-tracking features. You'll need to use separate time-tracking software if you need to track your time for billing or invoicing purposes. 

Wave's free accounting software is a suitable choice for small, service-based businesses that don't require advanced features. However, for growing businesses, Wave has significant limitations.

Which is better?

This round is a tie as both software solutions come with their own limitations. 
 

Wave or Xero for invoicing?

Xero lets you send up to 20 invoices per month with the Early plan and unlimited invoices with the other two plans. There's one fully customizable invoice template. Additional functionality includes recurring invoices, automated invoice reminders, bulk invoicing, and invoice replication. 

Wave lets you create and send professional invoices in just a few clicks. You can easily set up recurring invoices and track invoice payments. There are three invoice templates you can customize to meet your specific needs. You can even add your branding to invoices. 

Which is better?

Although Wave offers a solid number of invoicing features, Xero’s features are more developed.
 

Bookkeeping

With Xero, you can connect your credit card and bank accounts directly to the software. You can also import your bank statements manually. You'll then be able to categorize your expenses, split transactions, and more. 

Xero's smart categorization functionality remembers the past transaction categories you used and automatically categorizes new transactions for you. The software comes with several tools that help automate the reconciliation process.

Wave lets you make unlimited bank and credit card connections to track your transactions. All debit card purchases automatically will get logged and categorized. You'll be able to reconcile your accounts, set up automatic payments, and track your invoices. 

Which is better?

This round is a tie. 
 

Expense tracking 

Xero enables you to monitor expenses, categorize them, turn them into invoices, and bill your clients. You can even allocate an expense to a client. The expense tracking feature is included in all Xero plans. 

Users of the Established plan have access to more advanced expense management features, including expense claims, automatic receipt scanning, expense analytics, and the Xero Expenses app.

Wave's accounting software lets you track unlimited expenses. Each expense record can have details, including date, vendor, amount, and category. You'll also be able to attach an image of the receipt from your device directly to the expense.

Which is better?

This would depend on your specific needs. If you need basic expense-tracking functionality, Wave can be a solid option. If your needs are more advanced, go with Xero. 
 

Inventory management

Xero has a powerful inventory management feature that can be a useful addition for businesses that want to track services or products with Xero. You can add items, provide information about those items, and attach notes and files to them. You'll be able to keep track of the items in stock, which items are fast-selling, and even incorporate items into invoices.

Unfortunately, Wave doesn't come with inventory management functionality. 

Which is better?

Xero is superior in this category, as Wave doesn't offer inventory management features. 
 

Sales tax

Xero lets you include sales tax in your invoices and estimates. You can create default sales taxes for customers, sales, and purchases. Xero also includes a sales tax lookup feature that calculates sales tax automatically based on the address of your contact.

In Wave, when you create a sales tax, it will automatically generate a sales tax liability account on your chart of accounts, named after the sales tax. Each time you create a transaction with sales tax included, the amount of tax will be recorded in the sales tax liability account. You can add sales tax to invoices, expenses, bills, and income.

Which is better?

This round is a tie. 
 

Online payments 

With Xero, your customers can pay their online invoices with a debit card, credit card, or digital wallets like Apple Pay and Google Pay. The software works with popular payment gateways; Xero and Stripe work well together, as well as Paypal and GoCardless.

The Wave payment processing feature allows users to accept credit card and ACH payments. Wave users can accept all types of payments via bank deposit, credit card, and Apple Pay. 

Which is better?

This round is another tie, as both platforms offer online payment options. 
 

Financial reports and statements

Xero provides over 50 reports, such as the Sales tax report, Profit and loss, and Journal report. You have the flexibility to customize your reports as required and save your frequently used reports for quick access. For an additional monthly fee of $7, you can upgrade to Xero Analytics Plus for enhanced business insights.

Wave gives you access to exportable, basic accounting reports and financial statements. You'll find financial statements like Profit and loss, Balance sheet, and Cash flow, as well as Sales tax reports, Payroll wage & tax reports, and more.

Which is better?

Xero has more advanced financial reports and statements functionality than Wave. 
 

Payroll 

Xero integrates seamlessly with Gusto to streamline your online payroll management. You can  view and reconcile your payroll transactions and easily access Gusto from the Gusto payroll tab in Xero. You'll also be able to give your employees online access to their pay information.

Wave's payroll feature streamlines the process of running payroll and paying your employees and contractors. With just one click, you can deposit payments into the bank accounts of your employees using the software. The pricing varies for self-service and tax-service states. 

Which is better?

Xero doesn't have a native payroll feature, but it integrates with Gusto. Wave, on the other hand, has native payroll functionality. 
 

Multi-currency accounting 

The multi-currency accounting feature in Xero supports over 160 currencies. This allows you to monitor the impact of currency markets on your cash flow and profits and view reports in local or foreign currencies. Additionally, you can assign a default foreign currency to specific contacts to ensure that invoices, quotes, bills, and purchase orders are in the appropriate currency.

Wave doesn't support multi-currency accounting. 

Which is better?

Xero takes this round. 

Is Xero better than Wave? Our conclusion

Xero and Wave are both leaders in the accounting software field, but they cater to different types of businesses. 

Xero is ideal for medium to large-sized businesses with multiple users and a willingness to pay for strong accounting software. At the same time, Wave is perfect for small business owners looking for a free and easy-to-use solution. 

Xero offers a robust feature set and integrations, while Wave is budget-friendly and accessible for new accounting users. 

Ultimately, the choice between Xero and Wave will depend on the needs and preferences of your business, but both options are excellent choices for small business accounting software.